Congressional Testimony: Lee on USPTO Patent Operations
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course Posted: July 30, 2014 @ 12:37 pm
In her prepared remarks, Lee substantively will begin by saying she is pleased that Congress approved “a FY 2015 appropriation bill that provides USPTO with the authority to spend anticipated fee collections as estimated by the Congressional Budget Office.” Sadly, this is something to be thankful for as odd as it seems. While significant user fees are generated by the USPTO, without the approval of Congress the USPTO cannot keep and spend the funds collected. Lee explained that by being granted permission to keep and use collected user fees the Office will “continue reducing the patent application backlog, shortening patent pendency, improving patent quality, enhancing patent administrative appeal and post-grant processes, fine tuning trademark operations, expanding our international efforts and investing in our information technology (IT) infrastructure.”
Greater Demand, Reduced Backlog
Lee will tell Congress that the USPTO is on pace during FY 2014 to receive nearly 600,000 patent applications. She will tell the committee:
Our patent application workload continues to increase at a healthy pace. In FY 2014, we expect to receive nearly 600,000 patent applications. That represents an increase of more than 5% as compared to FY 2013. Our backlog of unexamined patent applications is less than 620,000 which is down from more than 750,000 in 2009 (a 17.3 percent decrease). Our goal is to reduce the inventory of unexamined patent applications to a manageable level that will allow us to achieve optimal pendency by FY 2019.
In terms of processing applications, our first action pendency has been reduced to approximately 19 months and our average total pendency has fallen to approximately 28 months. Our plan is to reduce those periods to 11.3 and 21.0 months respectively by FY 2018.
On a cynical note, I will observe that reducing the backlog will become much easier for the USPTO, as will meeting pendency goals, based upon the United States Supreme Court’s breathtaking decision in Alice v. CLS Bank. While not a subject of this hearing, as more and more becomes per se unpatentable as the result of 35 U.S.C. 101, the USPTO should easily be able to meet these goals, particularly in light of the reality that over 50% of patents issued by the USPTO related to software innovations (see GAO report at page 12). Issued software patents and pending applications will be seriously impacted by the Supreme Court’s decision in Alice.
Of course, the Supreme Court’s interpretation of patent eligibility is not the fault of Lee or anyone at the Patent Office, but they will become the front line in the fight as they are already issuing Alice 101 rejections in applications where no previous patent eligibility rejection was made. The Office is also withdrawing Notices of Allowance even after the issue fee has been paid. This coupled with the USPTO interpretation of the Supreme Court’s decision in Myriad should make it relatively easy for the USPTO to achieve these goals.
Post Grant Proceedings
Lee will tell Congress that when post grant administrative trials were created by the America Invents Act (AI), the office anticipated that it would receive between 400 to 500 petitions a year. For FY 2014, the Patent Trial and Appeal Board (PTAB) is on pace “to receive filings of approximately 1600 – 1900 cases year…”
Lee will also tell the Subcommittee that the number of Administrative Patent Judges employed by the USPTO now exceeds 210, which represents an increase of 121% since the enactment of the AIA.
Improvements and Administrative Actions
Lee will also tout a number of administrative actions taken by the USPTo that offer a variety of improvements. Most of what appears in this section of her remarks reads as political speak aimed at making it seem like the government is doing something important. Those familiar with the patent system and patent practice will likely wonder how, or even if, any of these actions do anything to improve the system.
What follow is some discussion of the highlights.
1. Enhancing Claim Clarity
According to Lee claim clarity is being enhanced by “an extensive, multi-phased training program for all examiners focused on evaluating functional claims and improving examination consistency…” While I am a fan of education and training, like most patent practitioners I see very little consistency within the Office. In some Art Units it is virtually impossible to get a patent, in other Art Units they issue patents on virtually every application. There is a growing and concerning disconnect between what is considered obvious for high-tech, complex innovations and what is considered obvious for the lowest-tech inventions such as ordinary gadgets. Ironically, the more rudimentary the innovation the less likely it will be obvious, which can’t make sense to anyone.
Claim clarity is also being enhanced through”extensive stakeholder outreach and engagement… and insights on enhancing claim clarity and improving overall patent quality.” This sounds good, and the USPTO has been much better about accepting industry feedback during the Obama Administration, but I have to question whether talking about claim clarity actually achieves claim clarity. Talking about a problem doesn’t solve the problem, and frankly the problems associated with lack of claim clarity have been caused by the courts. Patent claims and patent applications in general have become far more complex, longer, more detailed and increasingly obfuscate “the invention” as the result of judicial decisions. So we can talk about the issues all day and all night and it won’t matter until Judges, particularly Supreme Court Justices, get on board (which should happen at or about the time that pigs grow wings and begin to fly).
The final way the claim clarity is being improved is through the USPTO Glossary Pilot Program. Truthfully I am not optimistic about this pilot since this is one area where the law is extraordinarily clear. If you define a term it has the meaning you give it in the specification. If you do not define a term then the ordinary plain meaning as would be understood by one of skill in the art is given. Yes, there is a lot of litigation about what terms mean, but that is the essence of patent litigation and interpreting patent claims. Unless the law is changed to require all terms to be defined in a patent application I don’t see how this helps.
2. Empowering Consumers and Main Street Retailers
Lee will tell Congress that retailers, consumers and small business are being increasingly targeted in patent litigation, which is certainly true. She will go on to say that in order to “level the playing field and ensure individuals and businesses know their rights and are aware of available resources before entering into costly litigation and/or settlements, the USPTO has launched a useful online toolkit of information.”
I have poked fun at this in the past, and I will again now. The USPTO posting information on their website is fine, but to tout this as some great achievement that will empower those who are targeted by patent trolls is a stretch to say the least. Moreover, the information contained in the USPTO online toolkit is completely one-sided and makes it seem like all patent owners who seek redress for infringement are patent trolls. Still further, while the USPTO does suggest that it may be helpful to contact an attorney, it is also suggested that an attorney may be unnecessary for basic, preliminary communications with the patent owner or patent owner’s representative, which is undeniably bad advice. No patent attorney would ever recommend that an unsophisticated client independently contact a patent owner who is asserting a claim or threatening to sue.
3. Crowdsourcing Prior Art
Lee will tell Congress that “the USPTO is exploring a series of measures to make it easier for the public to provide information about relevant prior art in patent applications, including by refining its third-party submission program, exploring other ways for the public to submit prior art to the agency, and updating its guidance and training to empower examiners to more effectively use crowd-sourced prior art.”
While crowdsourcing is a hot topic in general, the unfortunate reality is that the provisions of the America Invents Act (AIA) that allow for the public to submit prior art for examiners to review have been so under utilized that they can only appropriately be labeled a complete failure. Indeed, during the first 15 months one could make a third-party preissuance submission there were only 1,228 such submissions filed, During this same time there were never fewer than 584,998 applications at the Patent Office awaiting first action. For more see USPTO Seeks Comments on Crowdsourcing Prior Art.
4. Cooperative Patent Classification
Lee will tell Congress that the USPTO, in cooperation with the European Patent Office, continues to move forward toward implementing the Cooperative Patent Classification (CPC) system, which first launched in January 2013.
This is one area where I think that Lee is under selling the importance of an initiative. Over the years the U.S. Patent Classification System became obsolete. It wasn’t updated continually to keep up with the changing technology and innovation landscape, which meant that rather than creating new classifications the Patent Office would continue to force new technologies into old categories. While the best patent search continues to rely on finding the most relevant patent classification and then looking at all the references within that classification, an improved classification system and generous examiner training on the new system should dramatically improved patent quality by making it much easier for patent examiners to in a realistic time frame find the best prior art currently available.
Of course, the sad reality is that this type of administrative action and its importance is really known to those familiar with the patent system. Ironically, those line items that represent little or no useful advance seem to sound quite good to the public and politicians, while what really will make a difference comes across as difficult to understand are hardly important.- - - - - - - - - - Later today, at 3pm Eastern, Michelle Lee, the Deputy Director of the United States Patent and Trademark Office, will testify at a hearing on Capitol Hill before the U.S. House of Representatives Subcommittee on Courts, Intellectual Property and the Internet. This panel, which is a subset of the House Judiciary Committee, is holding a hearing titled:
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About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.